Assembly Speaker Unveils Plan to Save Atlantic City Without Takeover by State

Finances would be monitored while troubled casino resort would have to meet benchmarks set out in 5-year plan

Credit: Martin Griff

Assembly Speaker Vincent Prieto (D-Hudson)

The state Assembly has still not taken up the Atlantic City takeover legislation sought by Gov. Chris Christie, but a measure billed as a compromise has cleared its first legislative hurdle.

The city, meanwhile, has figured out a way to stay open beyond this week, but remains on borrowed time.

And Christie again made it clear he remains uninterested in anything short of a full state takeover.

So, despite another busy week with near-daily public events on the Atlantic City issue, the question of what happens next to the cash-strapped resort is still very much mired in gridlock. And the collective-bargaining rights of the city’s public workers remain the key sticking point.

The Assembly held a full voting session yesterday, but left off of the agenda by Speaker Vince Prieto (D-Hudson) was a bill backed by Christie, a Republican, and Senate President Stephen Sweeney (D-Gloucester) that would allow the state to immediately takeover city finances.

The takeover legislation, which has already cleared the Senate, would also give the state the ability to immediately rip up union deals, something Prieto said goes too far.

Instead, Prieto is sponsoring his own Atlantic City intervention bill, and it won unanimous approval yesterday in the Assembly Judiciary Committee.

Key differences between the takeover legislation and Prieto’s measure include the creation of a new committee to oversee Atlantic City finances and the setting of financial goals or benchmarks. Both of those elements are not in the takeover bill, handing over most of the authority instead to the Christie administration.

The new oversight committee, with members from the executive branch and local officials, would also create an overall five-year plan to right the city’s finances. A special master appointed by the state Supreme Court’s chief justice would judge whether the specific benchmarks are being met on annual basis.

Prieto’s bill also sets up an enforcement process if the city fails to meet each benchmark, but only then would the bill trigger more aggressive measures like dissolving city departments and changing or even scrapping union contracts.

The bill also incorporates elements of a separate measure, which has also passed in the Senate, that would provide the city with much-needed cash from payments in lieu of taxes that would be made by the resort’s casinos. Those payments would total $120 million annually.

But Prieto, speaking at the start of the committee meeting yesterday, said it’s the protection of collective-bargaining rights for city workers that remains the core goal.

“When we talk about collective bargaining, I think that is a right people have negotiated in good faith,” Prieto said.

“There’s nothing they’re getting that’s carte blanche,” he said. “They’re getting the ability to come out of the woods, and they need that.”

And several officials from unions that represent city workers testified in favor of the bill, as did Atlantic City Mayor Don Guardian, who is also a Republican.

“This is very reasonable,” said Guardian, who has strongly opposed a full state takeover.

“It’s the difference between a democracy and a dictatorship,” he said.

Guardian said city government has been able to pass its own measure allowing workers to be paid every four weeks instead of two. That gives the city enough flexibility with its budget to survive until May, when new property tax payments will come in. The payment-schedule change should also stave off for several months a city shutdown that could have come as early as this week.

But not everyone was on board with the new measure yesterday, and whether Prieto can muster enough votes is still very much up in the air. The speaker did not post his own bill during the Assembly’s late-afternoon voting session, telling reporters afterward that he wants to give the Senate time to review the measure and submit any amendments.

“I’m on the other end of my phone any time to talk,” Prieto said.

Earlier in the day, before it was clear neither bill would be posted for a vote, Assembly Majority Leader Lou Greenwald (D-Camden) sent Prieto a letter that said delaying a state takeover leaves Atlantic City “on the precipice of catastrophe.”

“A bill that waits 3-5 years to address all of Atlantic City’s issues is not the answer,” Greenwald wrote. “We need help now. The city is largely insolvent already and kicking the can down the road on real solutions is part of the reason we have reached this point.”

But Prieto said the takeover bill, which Greenwald supports, would not have passed if he had put it up for a vote yesterday.

Atlantic City’s fiscal problems stem largely from the last recession and increasing competition from new casinos that have opened in neighboring states – resulting in the closing of four of the resort’s 12 casinos in recent years. The remaining casinos, meanwhile, have also successfully challenged their tax assessments, helping to reduce a ratable base that once totaled more than $20 billion to just over $7 billion.

A report released earlier this year by an emergency manager appointed by Christie predicted the local government would run out of cash by April. Even if stopgap measures could be found, the report said, the city faces a budget deficit that could be as large as $300 million over the next five years.

Christie, for his part, has repeatedly said he has no faith that Guardian and other local officials are up to the task of cutting spending enough to put the city budget back on solid footing.

Earlier this week, Christie’s administration took the city to court over revenue collected from property taxes earmarked for the local school district. He also spent Wednesday in the city meeting with Atlantic County Executive Dennis Levinson.

Although Christie routinely promoted as a presidential candidate his leadership abilities and a record of bringing people together to find compromise, he’s refused to budge at all on the issue of an Atlantic City takeover. Speaking in Trenton yesterday after a news conference on addiction services, Christie made it clear he does not support Prieto’s bill, labeling it “the union-protection bill.”

“It is a completely ineffective solution,” Christie said according to a transcript of the event provided by his office.

Sweeney, the Senate leader, declined comment on Prieto’s bill through a spokesman later yesterday.